MOSCOW (MRC) -- Alpek (Monterrey, Mexico) expects to finish commissioning and begin production at a Reading, Pennsylvania, recycled polyethylene therephthalate (PET) facility in the third quarter of 2021, reported S&P Global with reference to CEO Jose de Jesus Valdez' statement.
DAK Americas, Alpek's US subsidiary, bought the facility in late-May for USD98.1 million at an auction in the bankruptcy case of California recycled PET producer CarbonLite.
Valdez said the recycling and pelletization facility is one of the largest recycled PET units in the Americas, and can produce food-grade pellets.
The acquisition brought Alpek's total recycled PET capacity to 282,000 mt, "reaffirming its position as the largest PET recycler in the Americas and achieving the company's target of supplying its customers with 25% of rPET content before 2025," Valdez said.
Thailand-based Indorama Ventures, the world's largest virgin PET manufacturer, bought CarbonLite's rPET facility in Dallas, Texas, at the bankruptcy auction for USD63.87 million, and TGS Shelf II Acquisition LLC, an affiliate of Houston private equity firm The Sterling Group, bought a third CarbonLite facility in Riverside, California, at the auction for USD57.5 million, according to bankruptcy records.
Indorama is one of Alpek's partners in a major PET/purified terephthalic acid complex awaiting further construction near Corpus Christi, Texas. Valdez said July 22 he had no update on the progress of that project, which is undergoing a cost review throughout 2021. Alpek, Indorama and their partner Far Eastern New Century, aim to finalize engineering and construction contracts by year-end so construction can begin in early 2022.
The project includes a 1.1 million mt/year PET plant and an upstream 1.3 million mt/year purified terephthalic acid (PTA) unit. The three companies bought the unfinished project out of prior owner M&G Chemical's bankruptcy in 2018 for USD1.25 billion.
Since then, they have evaluated costs to restart construction that M&G halted in October 2017, and those efforts were suspended in 2020 amid COVID-19 restrictions.
When an analyst asked whether Alpek would buy a larger stake in the project and proceed if one or both partners decided not to push forward with it, Valdez said the company would consider those options if that situation arises.
Valdez noted that demand for virgin PET and polypropylene, which Alpek also produces, was seen strong as COVID-19 vaccinations have improved market confidence, which has strengthened the global economy. PP is heavily used in the automotive sector for dashboards, door panels and other vehicle plastics, but also is used to make plastic food takeout containers, carpet, and other products.
"Alpek has reached 1.2 million tons this period, setting a record for any second quarter in our history and achieving an 8% increase year-on-year," CFO Jose Carlos Pons De La Garza added.
Volumes in the company's plastics and chemicals segment rose 45% on the year, while polyester segment volumes rose 1%.
As MRC informed earlier, Mexican polyester producer Alpek reported a rise in Q2 net income because sales rose faster than costs. Quarter on quarter, sales rose because of higher prices and margins. Alpek did not discuss year-on-year trends. Quarter on quarter, Alpek noted higher margins for PET. In addition, margins for PP maintained their strength for longer than expected following the winter storms that hit the US in mid-February. Quarter on quarter, EBITDA fell because the rise in feedstock costs was not as pronounced as it was in the first quarter. Such increases cause positive inventory and carry-forward effects for the segment's earnings.
According to MRC's ScanPlast report, Russia's estimated PET consumption totalled 411,200 tonnes in the first six month of 2021, up by 12% year on year. Russian companies processed 62,910 tonnes in June, compared to 85,890 tonnes a month earlier.
Alpek operates two main business segments, focused on polyester, and plastics and chemicals, and is a leading producer of purified terephthalic acid (PTA) and polyethylene terephthalate (PET). It is also the largest EPS manufacturer in the Americas.